Angela Merkel is looking more vulnerable than ever

Germany's Chancellor Angela Merkel during a news conference after a EU leaders summit in Brussels, Belgium, December 18, 2015. REUTERS/Eric Vidal BERLIN (Reuters) - For the past decade, German politics has been a relatively dull affair, with Angela Merkel dominating at the national level and the major parties in agreement on all the big issues, from euro zone bailouts and refugees to the phase-out of nuclear energy.

But that may change in 2016, when five of Germany's 16 states hold elections in the build-up to the next federal vote a year later.

Not only is Chancellor Merkel looking more vulnerable than ever before because of her welcoming stance toward the hundreds of thousands of refugees fleeing war in the Middle East, but the rise of the anti-immigrant Alternative for Germany (AfD) party has injected a new element of surprise into the political landscape.

Add to that an unprecedented splintering of the electorate, which means that six parties have a legitimate shot of entering most state parliaments, and Germany's normally cozy, consensual politics begins to look a bit less predictable, and potentially more divisive, than it has in a long time.

The wild card is the threat of an attack by Islamist extremists on German soil, a risk highlighted on New Year's Eve when authorities received a tip that Iraqi and Syrian nationals were planning suicide bombings at train stations in Munich.

It could be fatal for Merkel, officials in Berlin acknowledge in private, if such an attack were carried out successfully by people who entered Europe with the flood of migrants, as was the case with two of the men involved in the Nov. 13 attacks in Paris.

Even if Germany is spared such a horror, the refugee crisis will continue to dominate the political debate this year, polarizing voters and emboldening Merkel's opponents on the right and left.

So far the most damaging attacks have come from her conservative sister party, the Bavarian Christian Social Union (CSU).

"If we don't see success in limiting the tide of refugees, we could have a grassroots political tremor in Germany," said one senior government official, who declined to be named because of the sensitivity of the issue.

"If Merkel doesn't deliver you could see the AfD approaching 20 percent in the polls," the official predicted.

Frauke Petry, chairwoman of the right-wing Alternative for Germany (AfD) party shouts during the party congress in Hannover, November 28, 2015. REUTERS/Axel Schmidt

AfD on the rise

Currently the AfD is polling between 8-10 percent, roughly double the 4.7 percent the party won in the last federal election in 2013, when it narrowly failed to clear the 5 percent mark needed to enter the Bundestag.

That seems relatively harmless if you compare it to other like-minded parties across Europe, like the National Front in France, the Freedom Party in Austria or the Danish People's Party, which enjoy more than twice as much support.

But the AfD's rise looks more significant when one considers that it has occurred against a backdrop of infighting and financial trouble within the party that might have crushed it.

In the past half year, the party has weathered the departure of its founder, embarrassing slurs about African reproductive habits from one of its leading politicians, and a party financing law from the government that threatened to strip bare its coffers.

In response to the new law, the AfD asked its supporters for donations and raised roughly 2 million euros in just three weeks, a testament to its drawing power.

In three state elections that are due to be held in March, the AfD's newfound strength will be on stark display.

It is on track to win 7 percent in the western states of Baden-Wuerttemberg and Rhineland-Palatinate and roughly twice that in Saxony-Anhalt in the east.

"In every one of these elections, the performance of the AfD will be key in determining what constellations are possible," Torsten Krauel wrote in a front-page editorial in German daily Die Welt last week.

A party member of the right-wing Alternative for Germany (AfD) party holds up a sticker with a strike through a portrait of German Chancellor Angela Merkel at the party congress in Hannover, November 28, 2015. REUTERS/Axel Schmidt

More fragmented

The rise of the AfD and a nascent comeback by the Free Democrats (FDP), a business-friendly, socially liberal party that was the kingmaker of German politics for decades before imploding in the last federal vote, means that there are now three legitimate right-of-center parties in Germany, including Merkel's conservative bloc.

Add to that the three leading parties of the left, the Social Democrats (SPD), Greens and hard-left "Linke", and German politics looks more fragmented than at any time since reunification in 1990.

Merkel could yet emerge as the big loser from the new German political landscape if she is unable to stem the tide of refugees in the months ahead.

If she is successful, it may be her coalition partner in Berlin, the SPD, who suffer most.

The rise of the AfD and return of the FDP would make it more difficult for the SPD to form left-leaning majorities at the state or federal level, condemning it to second-tier status for the foreseeable future.

And that weakness could turn the SPD into a more confrontational and unpredictable partner for Merkel as the next federal vote in 2017 approaches.